Choose an effective distributor: Choosing the right entity as the distributor of your products or services is the most important point. You can name a distributor you stumbled upon by chance, or it sounds impressive. However, you should keep in mind that you have made an appointment for your products to be distributed and sold. The concern is that the distributor will not act after the appointment, and the agreement you have signed will remain “on the shelf.” These situations become complicated when the trader enjoys long-term exclusivity in a territory. In this case, it`s not just that the distributor won`t do anything, but you won`t be able to name another better distributor for the same area. Companies can use distribution agreements for multiple purposes. Some use a distributor as a vehicle to bring their products to market. Others appoint a distributor to take advantage of their know-how or to share customer lists and contacts in the market. The main conditions of a distribution agreement also vary and reflect the requirements and intent of each agreement. The starting point is that international distribution agreements generally contain details on specific products and the specific area that will be included in the contract. Limit liability limitation: in most jurisdictions, the manufacturer is responsible for the damage caused by the use of the products. Some agreements try to transfer that responsibility to the distributor, but if they are tested by the courts, they probably will not hold. Therefore, the right way to resolve the liability risk is to formulate an effective compensation mechanism that limits the extent of your liability.

Such a mechanism should limit your liability in terms of both amount and time and be supported by appropriate insurance coverage. Third, if you are trying to sign a distribution agreement in a foreign country, use the foreign network. The U.S. Chambers of Commerce are located in most countries of the world (American Chamber of Commerce in Hong Kong, American Chamber of Commerce in the Netherlands, American Chamber of Commerce in Egypt, etc.). If your foreign branch is not yet connected to the local Chamber of Commerce, launch it immediately. The cost of joining these organizations is low and the benefits go far beyond learning how to negotiate a balanced allocation agreement. To ensure that a distribution agreement is in your best interests, it is important to know and understand your most important concepts. The key terms of a distribution agreement may vary depending on several factors, including the word “liquidated” simply means “fixed” or “agreed.” The amount of money to which the distributor is entitled by the manufacturer in the event of termination is indicated in the liquidation clause in the contract itself and is not left at a later date in the negotiation. As long as these liquidated damages are reasonable, they are applied. However, the compensation clause that can be liquidated would probably not deprive the distributor of an infringement obligation, given that antitrust legislation is a matter of public policy and the producer really cannot do anything to deprive the distributor of the right to make such a claim.

In fact, it is just a standard of fairness. Even if z.B. a distributor violates a contract by not paying a manufacturer`s invoice, the distributor should have the opportunity to treat itself. The manufacturer should not be able to enter an involuntary non-payment (perhaps the invoice has been lost) and use such an unintentional error to terminate a contract. A distribution contract may be international. The largest distributors of electronics and computing, including Arrow Electronics, Avnet, Ingram Micro and Tech Data, operate subsidiaries in a number of countries for wide geographic coverage.